Wet Seal Surfaces: Fool by Numbers

On May 23, The Wet Seal (Nasdaq: WTSLA) released first-quarter earnings for the period ended May 5.

• Sales grew by 10.3% to $138 million, and comparable-store sales increased by 2.7%.
  
  
• The company opened 18 new stores during the quarter (net of closings), for a total of 448 locations.
  
  
• For Q2 2007, Wet Seal expects sales between $147 million and $152 million, with EPS in the range of $0.05 to $0.08 -- both positive developments.
  
  
• Despite its turnaround efforts, Motley Fool CAPS investors still give the company their lowest one-star rating. Aeropostale (NYSE: ARO) and Abercrombie & Fitch (NYSE: ANF) get three stars each, while dELiA*s (Nasdaq: DLIA) gets four stars. See what Fools like you think of these stocks on our free CAPS site.

(Figures in millions, except per-share data.)

Income Statement Highlights

	Q1 2007	Q1 2006	Change
Sales	$138.0	$125.1	10.3%
Net Profit	$7.6	($14.0)	N/A
EPS	$0.07	($0.22)	N/A
Diluted Shares	105.2	63.2	66.6%

Get back to basics with the income statement.

Margin Checkup

	Q1 2007	Q1 2006	Change*
Gross Margin	35%	37.5%	(2.5)
Operating Margin	4.8%	3.4%	1.4
Net Margin	5.5%	(11.2%)	16.7

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets	Q1 2007	Q1 2006	Change
Cash + ST Invest.	$103.7	$87.5	18.6%
Inventory	$35.5	$32.7	8.5%

Liabilities	Q1 2007	Q1 2006	Change
Accounts Payable	$26.9	$20.9	28.5%
Long-Term Debt	$2.9	$6.4	(54.2%)

The balance sheet reflects the company's health.

Cash Flow Highlights

We'll have to check back in the 10-Q to find out what's happening with Wet Seal's cash.

Free cash flow is a Fool's best friend.

Related Foolishness:

• dELiA*s Tough Deal
• bebe's Unsexy Sales
• Urban Outfitters' Positive Direction

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.